PremiumSisodia said the administration is working towards its ambitious vision of making the national capital a productive and high-earning society that can match the city state of Singapore in terms of per capita income
The Delhi government presented its ₹75,800 crore budget for FY23 on Saturday with a strong emphasis on generating jobs while making additional provisions for making education, health infrastructure even and put the state on path of high growth. The efforts are already showing, with state GDP expected to grow by 10.23 per cent in FY22 against a contraction of 3.86 per cent in FY21 largely due to Covid disruptions. In an interview deputy chief minister Manish Sisodia said that the administration is working towards its ambitious vision of making the national capital a productive and high-earning society that can match the city state of Singapore in terms of per capita income. In this regard, he said, government’s Rozgar Budget would intend to create as many as 20 lakh jobs over next five years. The minister also highlighted that despite eroding revenue surpluses and end of GST compensation next year, the reform initiatives by way of its new excise policy and restructuring of property tax regime should provide it enough funds needed to further bolster the developmental plans for the state. Excerpts:
The budget 2022-23 is your eight presentation of financial report card of the government. During these years the size of Delhi budget has more than doubled from a level of ₹30,000 crore to close to ₹76,000 crore now. How has been the journey?
The journey has been very interesting because we did not think way back in 2015 that Delhi could achieve such fast growth. In the first budget that I presented, there were lot of dreams but also a realisation that achieving big goals would be difficult. This was so because in the past the size of Delhi’s budget had grown by mere ₹5,000 crore in five to seven years. In fact, 2011 onwards it increased from ₹25,000 crore to just about ₹30,000 crore. This was very depressing as it gave a sense that if your budget increases by ₹1000 crore per year, how you are going to work. However, the government decided to open up to suggestions and the initial communication between government and traders set the roadmap for tax reforms under VAT and also helped in streamlining GST systems later. This has consultative process has resulted in not achieving rapid growth but also scaling up the size of the state budget at much faster pace in past few years.
You have given the idea of making Delhi’s per capita income match that of Singapore by 2047. But Delhi has fallen down one place to reach third spot in terms of Indian states with highest per capita income. Is the dream achievable?
The fall by one spot at the national level does not bother us. Our target is to bring Delhi’s per capita at par with that of prevailing rates in Singapore by 2047, and we are on course. We have to see that our per capita (at current prices) has grown by 16.81 per cent to close to ₹4.02 lakh in FY22. This is national per capita income of about ₹1.5 lakh. We need 14 per cent growth per year to reach per capita of Singapore prevailing in 2047. We have already done better than that this year and with 20 lakh new jobs coming into the system in the next five years, per capita growth will shoot up even higher at over 20 per cent over next few years.
You have talked about 20 lakh new jobs. The budget this year has also been billed as Rozgar Budget. What is the strategy to provide employment opportunity to that many people in these difficult times?
We have come up with the number – 20 lakh jobs in next five years – after extensive research. Our economic team has done deep research with the market. About 150 meetings have been held with Delhi traders, associations, markets. We have tried to understand how will these segments will get the growth and what the government can do to get that growth. We have created a database on how many jobs can be created if their growth is restored. We have included all these sectors in the budget that would generate jobs. So about 8-10 sectors have been identified for pushing growth and job creation. These include retail sector, food and beverages, logistics and supply chain, travel & tourism, entertainment, construction, real estate, electronics, EVs information and green energy. To implement the policies focused on employment generation about ₹4,500 crore will be required during the next 5 years. An outlay of ₹800 crore is proposed for all these programmes for FY23. The aim is to increase the percentage of the working population of Delhi from 33% to 45% in the next five years.
The Delhi budget seems to have missed the bus when it comes to providing relief to the common man from current spate of price rise with inflation also shooting up above RBI’s 6% tolerance level?
The state government has earlier worked only for this to ensure that its citizens are not burdened with price rise and shrinking incomes. We reduced the rate of electricity and in several cases brought it down to zero. Water is available free of charge to many, women can travel free in buses, school education has been made almost free, health is free and even if you meet an accident, all your expenses are taken care of by the state government. So, with all these efforts, we in some ways are helping citizens of Delhi to fight price rise even with their limited earnings. We have been working on these for some time and are consolidating its coverage so that the benefit reaches maximum people.
While the size of the Delhi budget has been increasing, its revenue surpluses are shrinking. Does it indicate to financial stress that the state may be heading towards?
We have some fiscal deficit but we will cover it. In last two years due to the pandemic, the tax collections suffered. WE launched new excise policy in November that will provide the state an additional ₹3,500 crore. We are also rationalizing the property tax for home registration, that will get some additional revenue to the state. In addition, we see huge potential from GST collections. The steps that we had taken and some also coming in this budget will help in creating more jobs and as the market economy increases, so tax will also increase.
With regard to GST, is the Delhi in favour of providing compensation to states for an extended period?
This is not only the view of Delhi but several states. The compensation payment by the Centre is seizing by the middle of this calendar year. It will be challenging to the states. All states had surrendered their tax rights to facilitate implementation of GST. You should understand that with Covid or no Covid, if there was no GST on central government’s initiative, then states would have right to take care of their economy based on the requirement. When you got their rights surrendered, you have to look that states don’t starve.
Is the state in favour to merging two rates of GST viz 12-18 per cent as is being discussed by the Centre with states and the proposal may land before GST Council soon?
These are yet only proposals but Delhi supports lower GST rates and higher compliance. This is because higher tax rates encourage evasion. Raising the rates never gives a solution. AI (artificial intelligence) based enforcement and lower rates, will only improve compliance and raise tax collections. In the case of merging two GST rates, taxes may have to be increased for certain goods and services and lower for a few. This is not a fair system. Why merge the rates, why not bring down the prevailing rates itself.
The budget doesn’t seem to have focused on industrialisation of the state and make the state big contributor to Atmanirbhar Bharat?
Delhi has limited scope for industrialization because of land resources and because of pollution measures. So new industries coming up in Delhi, has its limitations. So, in the budget we have come up with the concept of Electronic City. We will provide space with full infrastructure where electronic companies can come and set up their manufacturing and assembly plants. It will be on plug and play mode so units can start activities quickly. We have also spoken to a few global players to set up their facilities there. We will also redevelop 25 notified non-conforming industrial areas in next five years where the focus will solely be on developing infrastructure.
Heath and education have been the mainstay of focus of the government for long. Is there anything in the budget for these important sectors?
We are consolidating our programmes in these sectors that were started earlier. The government has also provided a sum of ₹50 crore next year for a school science museum. Moreover, Delhi Teachers’ University has also started its work and going to provide BEd courses from next year. Also, over 3 lakh students of class 11th and 12th of Delhi Government Schools under Business Blaster programme worked successfully on 51,000 business ideas and generated thousands of business ideas on which these children are working continuously. The Business Blasters scheme in Delhi Schools is to be expanded to the private schools also now.
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